Colella v. Atkins Nutritionals, Inc., 17-cv-5867 (KAM)

Decision Date07 December 2018
Docket Number17-cv-5867 (KAM)
Citation348 F.Supp.3d 120
Parties Joseph COLELLA, Individually and on Behalf of Other Similarly Situated Persons, Plaintiff, v. ATKINS NUTRITIONALS, INC., Defendant.
CourtU.S. District Court — Eastern District of New York

Jason Barnes, Barnes & Associates, Jefferson City, MO, Matthew L. Dameron, Williams Dirks Dameron LLP, Kansas City, MO, David Anthony Straite, Kaplan Fox & Kilsheimer, New York, NY, for Plaintiff.

Sandra Denise Hauser, Dentons US LLP, New York, NY, Grant J. Ankrom, Dentons US LLP, St Louis, MO, Gregory T. Wolf, Dentons US LLP, Kansas City, MO, Michael J. Duvall, Dentons US LLP, Los Angeles, CA, for Defendant.

MEMORANDUM AND ORDER

MATSUMOTO, United States District Judge:

Plaintiff Joseph Colella, ("plaintiff" or "Colella"), brings this action against defendant Atkins Nutritionals, Inc ("defendant" or "Atkins Nutritionals") alleging violations of N.Y. Gen. Bus. Law ("NYGBL") §§ 349 and 350 in connection with defendant's alleged misleading labeling of its Atkins line of food products. (See ECF No. 1, Complaint ("Compl."); ECF No. 26, Amended Complaint ("Am. Compl.").) In the Amended Complaint, plaintiff seeks declaratory relief, injunctive relief, actual damages, statutory damages, punitive damages, restitution, disgorgement and attorneys' fees and costs. (See Am. Compl. at 22.)

I. Background
a. Procedural Background

Plaintiff's counsel has filed putative class action lawsuits in federal courts in New York, California and Missouri. In the putative class actions, the plaintiffs alleged that defendants misleadingly labeled their products as having low or no Net Carbs, despite the presence of sugar alcohols, which plaintiff alleges affect blood sugar levels, contrary to the claims on the Atkins Nutritionals products packaging. See Smith v. Atkins Nutritionals, Inc. , No. 18-CV-04004, Doc. 19 (W.D. Mo. May 8, 2018); Fernandez v. Atkins Nutritionals, Inc. , No. 3:17-CV-1628, 2018 WL 280028 (S.D. Cal. Jan. 3, 2018) ; Johnson v. Atkins Nutritionals, Inc. , No. 2:16-CV-4213, 2017 WL 6420199 (W.D. Mo. Mar. 29, 2017) ; Colella v. Atkins Nutritionals, Inc. , 17-CV-5867 (E.D.N.Y).

On October 6, 2017, plaintiff filed his putative class action Complaint. (See ECF No. 1, Compl.) On February 8, 2018, after a pretrial conference, plaintiff amended the complaint. (ECF No. 26, Am. Compl.) On April 9, 2018, defendant filed a motion to dismiss pursuant to Federal Rules of Civil Procedure Rule 12(b)(6) on the bases that (1) plaintiff's state law claims related to Atkin Nutritionals' quantitative Net Carbs claims and calculation method are preempted by federal law, (2) plaintiff's claims should be dismissed pursuant to the primary jurisdiction doctrine, (3) plaintiff' claims should be dismissed for failure to satisfy the pleading requirements of Fed. R. Civ. P. 8, (4) plaintiff fails to adequately allege injury for his NY General Business Law claims, (5) plaintiff's breach of warranty claims should be dismissed as plaintiff failed to provide defendant with notice, and (6) plaintiff lacks standing to seek injunctive relief. (ECF No. 27-1, Memorandum in Support of Motion to Dismiss ("Def. Mem."), at 7-9.)1 By letters filed October 12, 2018 and November 2, 2018, defendant provided the court with supplemental authority supporting its Motion to Dismiss. (See ECF No. 35, Defendant's Supplemental Authority Letter; ECF No. 37, Plaintiff's Supplemental Authority Letter.) For the following reasons, the defendant's motion to dismiss is granted in part and denied in part.

b. Factual Background

Plaintiff, in the Amended Complaint, alleges that Atkins Nutritionals' labeling of Net Carbs on its food products is "false, misleading, and likely to deceive consumers." (Am. Compl. ¶¶ 1, 51.) The three labeling claims that plaintiff alleges are false, misleading and likely to deceive consumers are (1) the use of the phrase "Xg Net Carbs" while excluding sugar alcohols, (2) the use of the phrase "Only Xg Net Carbs," and (3) Atkins Nutritionals "Counting Carbs" label, which explains the calculation method for Net Carbs and states that sugar alcohols "minimally impact blood sugar." (Id. ¶¶ 53-55.) Plaintiff alleges that the claims are false, misleading and likely to deceive because Atkins Nutritionals claims that sugar alcohols "minimally impact blood sugar", but sugar alcohols are proven to "have a significant impact on blood sugar levels." (Id. ¶¶ 3, 30-32.) Atkins Nutritionals' website allegedly explains that the calculation of Net Carbs is based on science and reflects "the total carbohydrate content of the food minus the fiber content and sugar alcohols." (Id. ¶¶ 16-17.)2

Plaintiff alleges that the Atkins Nutritionals website also states:

Net Carbs are the carbohydrates that significantly impact the blood-sugar level; they're the only carbs that count when following Atkins. The good news is that the grams of carbohydrate in fiber, glycerine, and sugar alcohols don't break down and convert to blood sugar and need not be counted by people on the ANA.... So Net Carbs represent the number of grams of total carbohydrate minus those that do not impact blood sugar.

(Id. ¶ 18.)

According to plaintiff, however, Atkins Nutritionals' claims are contradicted by science. Dr. Atkins originally rejected the use of sugar alcohols on the Atkins Diet, and other scientists have refuted Atkins Nutritionals claim regarding sugar alcohols' limited impact on blood sugar. (Id. ¶¶ 30-32.) Plaintiff cites the Diabetes Teaching Center at the University of California, San Francisco, and Dr. Regina Castro of the Mayo Clinic, who both state that sugar alcohols can affect blood sugar levels. (Id. ¶¶ 31-32.) Plaintiff thus alleges that "sugar alcohols do impact blood sugar more than a minimal amount, and Atkins' ‘Net Carb’ count does not assist consumers with tracking carbohydrates that impact blood sugar because it omits sugar alcohols from its equation." (Id. ¶¶ 27, 52-53.) Plaintiff also cites to an FDA warning letter issued in 2014, wherein the FDA admonished a company for failing to include maltitol in its Total Carbohydrate count." (Id. ¶ 44 (citing Food and Drug Administration Warning Letter ONPLDS 20-01 (June 20, 2001).) Here, however, the exemplar label provided by plaintiff in its Amended Complaint reveals that maltitol, a sugar alcohol, is included in the total carbohydrate amount, but is then subtracted from the total carbohydrate amount, along with fiber, to obtain the Net Carb amount. (Id. ¶ 22.)

In the Amended Complaint, plaintiff provides an example of an allegedly misleading label that states that Atkins Endulge Chocolate Candies have only one gram of Net Carbs. (Id. ¶¶ 21-26.)

According to plaintiff, the representations made in the labeling pictured above are "identical or substantially similar" to the representations that appear on the Atkins Nutritionals products identified in paragraph 20 of the Amended Complaint. (Id. ¶¶ 20, 25.) The nutritional label includes the following categories: calories, fat calories, total fat, saturated fat, trans fat, cholesterol, sodium, potassium, total carbohydrates, dietary fiber, sugars, sugar alcohols, protein, Vitamin A, Vitamin C

, Calcium and Iron. (Id. ¶ 22.) Additionally, the packaging includes the formula Atkins Nutritionals utilizes to calculate Net Carbs and explains that fiber and sugar alcohols are excluded from the Net Carb number because they minimally impact blood sugar. (Id. ¶ 25.) Plaintiff does not allege that he purchased the Atkins Endulge Chocolate Candies that he provided as an example of a misleading label, and only alleges that he purchased three of the thirty-one food items listed in paragraph 20 of the Amended Complaint. (Id. ¶ 52.)

Plaintiff alleges that he believed Atkins Nutritionals' alleged misrepresentations about Net Carbs on its product labels and relied on those representations in deciding to purchase three products sold by Atkins Nutritionals. (Id. ¶¶ 55-57.) Specifically, plaintiff alleges that within the two years preceding the filing of the Amended Complaint, plaintiff purchased a Chocolate Chip Cookie Dough Bar, Sweet & Salty Trail Mix, and Chocolate Peanut Candies from a Wal-Mart store in Nassau County, New York. (Id. ¶ 52.)

Plaintiff's Amended Complaint asserts three claims:(1) violation of NYGBL § 349 ; (2) violation of NYGBL § 350 ; and (3) breach of express warranty. (Id. ¶¶ 67-99.) Plaintiff alleges that by including misleading statements in its labeling, Atkins Nutritionals violated NYGBL § 349 which prohibits deceptive and unfair trade practices, and NYGBL § 350, which prohibits false advertising. (Id. ¶¶ 67-89.) Plaintiff seeks an injunction to enjoin defendant's alleged deceptive practices in connection with defendant's alleged violation of NYGBL § 349. (Id. ¶ 80.) Further, Plaintiff alleges that Atkins Nutritionals breached its express warranty that its products would conform to Atkins Nutritionals' written promises on it labels that its products "contained minimal ‘net carbs’ and ... sugar alcohols contained therein had minimal and effectively no impact on blood sugar," when its products did not have the qualities promised. (Id. ¶¶ 92-98.)

II. Legal Standard

"To survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint must contain sufficient facts that if accepted as true ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A well-pleaded complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the ... claim is and the grounds upon which it rests. Carson Optical Inc. v. eBay Inc. , 202 F.Supp.3d 247, 252 (E.D.N.Y. 2016) (citing Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ). A complaint providing only "labels and conclusions" or "a formulaic recitation of the elements of a...

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